Intel will pay $1.5 billion in Nvidia settlement

Intel and Nvidia are burying the hatchet and put away their differences and ongoing lawsuit and have settled for a $1.5 billion, six year cross-licensing agreement between the rival chipmakers. The long-term patent deal will see both companies using each others technologies and an end to any and all outstanding legal issues between the two firms.

"This agreement ends the legal dispute between the companies, preserves patent peace and provides protections that allow for continued freedom in product design," said Doug Melamed, Intel senior vice president and general counsel. "It also enables the companies to focus their efforts on innovation and the development of new, innovative products."

Under the deal, Intel, the world's largest chipmaker will fork out US$1.5 billion in five annual installments, in exchange for Nvidia's full range of patents. According to Nvidia, they will retain use of Intel's patents, consistent with its existing six-year agreement.

However this excludes Intel's proprietary processors, flash memory and certain chipsets for the Intel platform.

"This agreement signals a new era for Nvidia," said Jen-Hsun Huang, Nvidia's president and CEO. "Our cross license with Intel reflects the substantial value of our visual and parallel computing technologies. It also underscores the importance of our inventions to the future of personal computing, as well as the expanding markets for mobile and cloud computing."

In November 2009, Intel paid rival AMD US$1.25 billion as part of a five-year cross-licensing deal in order for AMD to drop its legal charges.

With the exception of one agreement term that is confidential, Intel has made the entire Nvidia deal available online at www.intel.com/pressroom/legal.